(COURT OF APPEAL)

MUST AMIN v. KHRISTO BALANDRIOUS

AC.REV-442-1968

Principles

  Negotiable Instrument—Excuses for delay in making the protest—Bills of Exchange Ordinance, s. 48 (1)—Two consecutive stages for protest are provided for

The Bills of Exchange Ordinance, S. 48 (1) is of two parts; the first part is about delay that is caused by circumstances beyond the control of the holder; this is the excusable delay, that which occurs after the two business days following the day of payment. The second part is about delay that is caused by any other circumstances in spite of the fact that the holder has exercised all reason able diligence. Here the section does not fix a certain period within which the protest has to be made. It is a question of fact to be decided by the court.

Advocates: Abdel Halim El Tahir for the applicant

Abdalla El Hassan and Abdel Wahab Abu

Shakiema for the respondent

Judgment

Osman El Tayeb C.J. September 13, 1969:- Applicant (plaintiff) instituted a suit in October 1965, against respondent (defendant) claiming the value of a cheque drawn by respondent to him as drawee payable on December it, 1964 on Barclays Bank—Sharia El Gamhuria, Khartoum. The cheque was crossed and it was deposited with Barclays Bank, Omdurman, applicant’s banker, for collection. It was dishonoured, being countermanded by respondent.

Applicant received back the cheque on December 8, 1964, and, as he had already been engaged on a journey outside the Sudan and he was leaving the next day, he handed over the cheque to his advocate to take the. necessary legal action about it Applicant actually left the Sudan on the next day. The advocate made the application for protest on December 15, 1965.

When the suit was instituted, it was contested for respondent on two. grounds: (1) that the protest was made out of time contrary to the Bills of Exchange Ordinance, s. 45; (2) the cheque was made without consideration or that the consideration, if any, was an illegal consideration. And the issues were accordingly framed.

After the hearing of the evidence on both sides, and receiving their written submissions, the learned District Judge found the facts above stated about the date of the protest, and further found that the delay was not excusable under the Bills of Exchange Ordinance, s. 48. He was of the opinion that the advocate being the agent of applicant, his act was applicant’s act; and that no reasonable excuse for the delay was established. This point was decided in favour of respondent.

On the second point, the learned District Judge correctly stated the law as to the presumption on the consideration and its legality for the cheque, and that the rebuttal of that presumption rested on respondent. He found that the allegation of respondent was that the cheque in question was given for a foreign cheque in foreign currency and payable outside the Sudan. He further found that respondent failed to prove this allegation. After reviewing the evidence of respondent and his witnesses, pointing to the contradictions on their testimony and especially as to the existence of the foreign cheque, which was once said to have been handed back to applicant and then said to be in a bank in Nairobi, the learned District Judge decided that this allegation about the foreign cheque was not proved, and therefore respondent failed to rebut the presumption of the existence of legal consideration for the cheque made by him to applicant. This point was decided in favour of applicant.

Applicant made application for revision against the first point, on which his suit was dismissed. But no application was made by respondent on the second point. The application for revision was decided on written submission. The learned Province Judge dismissed the revision. He decided that the delay for seven days after the date of knowledge of dishonour was contrary to reasonable diligence.

On September 5, 1968, advocate Abdel. Halim El Tahir on behalf of applicant applied for revision to the Supreme Court (as it was). All the argument advanced by him was centred on the question of the protest (to which I shall refer later). This application was summarily dismissed with a short note briefly stating their reasons, which were first that the application was out of time, and secondly that the protest was not made within time, and then the note referred to the illegality of the consideration.

Hence comes this application for review, and the questions that we have to deal with are two: the first one is whether the application for revision to the Supreme Court was out of time, justifying its summary dismissal; and the second is whether the delay in making the protest was excused. Of course we should not look at the question relating to the consideration for the cheque, and it has to be stressed that the mention of it in the note of the Supreme Court was wrong. That question was decided in the court of first instance in favour of applicant, and the respondent had not raised it by way of cross-application to the Province Court nor to the Supreme Court; and the fact that it was only mentioned in the reply to the revision before the Province Court, and also in the reply to this revision, should not have induced the Supreme Court to deal with it, and so it is the case here that we should not consider it.

As to the date of the application for revision, I should say that it has been the practice of this court, not to consider these procedural limitations with rigidity and seriousness. We give consideration to both the time of delay out of the limitation period and the merits of the application. Where it is found that the delay was not too long and the merits justify the consideration of the application, we relax the procedure for the ends of justice and fairness.

In the present case the decision of the learned Province Judge was signed by him on July 29, 1968,and the application for revision was made on September 5, 1968, in all a period of one month and six days between the two dates. Then it has to be known when this decision was communicated to applicant in order to ascertain and assess the amount of the delay. In the proceedings there is the normal letter, dated July 30, 1968, returning the proceedings to the District Judge with a copy to the advocate. There is nothing else to show when this letter was received by the advocate nor as to how and by what means it was sent. In these circumstances, and assuming that the application was made about two or three weeks thereafter, I take it that it was not too long to justify the summary dismissal, especially when we find that there is a question in the merits worthy of consideration.

I come to the important point of the delay of the protest, beyond the two business days following the day of payment, as required by section 4and whether that delay was excusable by the application of section 48 (1). As I said it is an important point, and the former Supreme Co

was wrong in simply passing over it without giving it the required consideration and interpretation. This subsection reads as follows:

Delay in making presentment for payment or the protest for non- acceptance or for non-payment is excused when the delay is caused by circumstances beyond the control of the holder, and not imputable to his default, misconduct or negligence. When the cause of delay ceases to operate presentment and protest shall be made with reasonable diligence".

The section is of two parts, the first part is about delay that is caused by circumstances beyond the control of the holder and not imputable to his default, misconduct or negligence, this is the excusable delay, that which occurs after the two business days following the day of payment. Thereafter, when the causes of the excusable delay have ceased to operate or exist, the presentation and protest have to be made with reasonable diligence. It is clear from this that two consecutive stages for protest have been provided for: the first excusable delay that is caused by circumstances beyond the control of the holder, and the second stage excusable delay that is caused by any other circumstances in spite of the fact that the holder has taken all reasonable diligence. For example when the holder has no knowledge of the dishonor of a cheque, any delay after the two business days is of course excused, because here there are circumstances beyond his control. After the knowledge of the dishonor, he has to exercise reasonable diligence, and delay occurring in spite of that is also excused: an example of this is the failure to ascertain the address of the drawer, while reasonable efforts have been made to find that address.

In this case the consideration has to start from the time that applicant received the cheque in dispute with the notification of dishonor, and the question is whether until the cheque was protested he has exercised reasonable diligence.

Advocate for applicant submitted that the law speaks about the holder of the bill, not his agent or advocate. That the existence of circumstances beyond his own control, or the commission of default, misconduct or negligence must be that done by him personally, so as to deprive him of the benefit of the section. He submitted that applicant, after receiving back the dishonored cheque on December 8, 1964, left the country the next day, leaving the cheque in the hands of an advocate, and if there was delay in making the protest for any reason, it should not be attributable to him. I do not agree to this proposition: the holder in the normal course of business can act by himself as well as by an agent, whether that agent be an advocate or other person. Until the time he had back the dishonored bill, he was excused, because there existed circumstances beyond his control. The cheque was crossed and he had no knowledge of the dishonor until that time. Thereafter he entrusted his advocate with any necessary action on the cheque. And the advocate must, on behalf of applicant, unless there are circumstances beyond his control, act without default, misconduct or negligence and exercise reasonable diligence in making the protest. The act of the advocate is the act of applicant in this respect.

The other argument raised by the advocate for applicant is that the exercise of reasonable diligence is a matter of fact, and that the delay of six or seven days after the knowledge of dishonor was not long enough to justify deciding that reasonable diligence was not exercised. I agree with this argument to the extent that the exercise of reasonable diligence is a question of fact. Here, it is to be noted that the section does not fix a certain period within which the protest has to be made. In the first part of the section the period was fixed by the two business days following the date of payment, but when the protest could not be made by the existence of circumstances beyond the control of the holder, then he or his agent must make it at any time, provided that reasonable diligence is being exercised. The court must consider the amount of the delay, with regard being had to all the surrounding circumstances in order to reach the conclusion of fact whether reasonable diligence was exercised or not. The burden, of proof shall be on applicant to establish that reason able diligence was exercised until the protest was made.

The law is strict in providing that the holder cannot sue on the cheque or other bill unless it was duly protested, but it tends to relax the process, as to the time of the protest, no time limit is actually fixed after the first two following days. It is only necessary to be diligent to the extent that the drawer should not be put under the impression that no action would be taken in respect of his cheque.

For these reasons, I allow this application and direct that the, suit go back for retrial on an issue as to the exercise of reasonable diligence by the holder as indicated.

Costs to follow the event.

SaIah Eddin Hassan J. September 13, 1969:-I have read with interest the able judgment of my learned brother, His Honour the Chief Justice. I entirely agree that this application for review should succeed. Applications for review are sparingly granted and only when there is sufficient reason according to the Civil Justice Ordinance, s. 184 (1). Sufficient reason could be interpreted with the guidance of Order 47, rule (1) of the Indian’ rules of procedure to apply to the following cases:

1. On the ground of the ‘discovery of new and important matter or evidence which after the ‘exercise of due diligence, was not within the knowledge of the ‘party or could not be produced by him at the time when the decree was pas or order made;

2. On account of some mistake or error apparent on the fact of the record; or

3. Any other exceptional cases in which obvious injustice would be worked by strict adherence to the terms of the judgment as originally passed.

In our present case the revision was summarily dismissed in the first place on the ground that it was hopelessly out of time. In my opinion obvious injustice will be worked from this decision, which was made without the ascertainment of a very crucial date, i.e. the date on which the decision of the Province Judge was communicated to applicant. This point has been much elaborated by my learned colleague in his judgment and there is no need to repeat it again.

Secondly the reference by the Court of Appeal to the legality or illegality of the consideration is the outcome of an error apparent on the face of the record of the revision. This point was decided in favor of the applicant in the District Court and ever since it was never challenged either in the Province Court or in the Supreme Court of Appeal. Why it was handled by the Supreme Court must obviously be the operation of a mistake.

Last but not least, and with the object of avoiding obvious injustice, an interpretation put on the Bills of Exchange Ordinance, s. 45, vis-à-vis the time during which a bill must be protested should be reviewed. I am of opinion that this matter is a question of fact which depends upon the nature of the bill and the circumstances of the particular case. A cheque which is countermanded by the drawer differs in my opinion from a cheque which is dishonored for lack of funds when we come to talk about the importance of the limits in making a protest. Section 45 fixes imperatively a time limit for the protest which is one of the two business days which follow the day of non-payment. Section 48 (1) makes excuses for delay in making the protest. Excuse is given when the delay is caused by circumstances beyond the control of the holder and not imputable to his default, misconduct or negligence. Moreover when the cause of delay ceases to operate protest shall be made with reasonable diligence. In trying to assess as a matter of fact whether seven days or ten days delay in making the protest is excusable or not regard should be mainly given to the nature of, the bill and the reasons for the delay in addition to the efforts and the circumstances of the holder during this gap of time. A cheque which is countermanded by the drawer should receive very liberal and lenient treatment in working out the time fixed for protest and the extension of it which is authorized by law; because the drawer knows of the dishonor before the holder himself,, he being the author of it. In such instances leaving the law aside the protest itself looks to be meaningless. In the case of a cheque which is dishonored for any other reason the question of the limit may be construed more rigidly.

I agree that this case should go back for retrial on the issue concerning the exercise of reasonable diligence by the holder and costs should follow the event.